Managing Information: Multiple Choice

When it comes to technology expertise, should you: turn to an outsider? deputize an employee? do neither? do both?

I'm often asked if there are differences between handling an information-technology budget measured in millions of dollars and one measured in thousands. In fact, there's only one significant difference: large companies can correct their mistakes; small companies usually have just a single chance to get it right.

The issue comes into sharper focus when you consider that small and growing companies often find themselves with the same critical information-technology needs as big companies but with fewer resources. Cost generally isn't the problem, because most small companies don't need mainframes and squads of programmers. The real difficulty lies in finding the right personnel to make the proper choices.

In big companies chief information officers (CIOs) make those choices -- often so well that they concentrate on the technology to the exclusion of making money with it. Small companies are stuck with choosing between an outside consultant or someone within the company to take charge.

As the leader of a once-small company (Computer Associates, which I started in 1976 with three employees, one product, and no investment capital), my advice is to choose neither. Instead, choose both.

Total dependence on an outside consultant means handing your company's future to someone who doesn't understand your business. Dependence on an insider means turning everything over to someone who is learning on the job. Here's a more reasonable approach:

1. Sit down and try to figure out what you want from a computing system. Forget about what you can afford and concentrate on what you'd like. Chances are, you really can afford it.

2. Designate someone within the company as proto-CIO, that is, someone to act as CIO until you can afford one. Be wary about handing the job to your finance person, because then information technology could end up as an adjunct to bookkeeping rather than a strategic asset that serves the whole company. Information technology is going to be your company's most important asset. Guard it with your best person.

3. Have the proto-CIO work up a wish list based on your early doodling (see 1) plus input from every part of the company. You'll discover that almost everyone in the company has an unexpressed need; give your employees a chance to express themselves, because you're not going to get many chances to correct errors after the critical decisions have been made.

4. Start looking for a third-party supplier. It could be a value-added reseller, a systems integrator, or a consultant -- all of whom provide essentially the same service: putting together hardware and software to build a system, and then taking one-stop responsibility for its success. Guard against lackluster service and support by making sure your payment is spread over the length of the contract -- and tied to your satisfaction. You might end up paying more, but you don't want to have saved a few pennies only to guarantee slow support.

5. Make sure the new system in some way leverages off your existing computing installation. Ideally, it shouldn't call for training from scratch, and the new and the old components should all hook up together. Whatever system you choose, don't let anyone sell you on what we in the computing business call bleeding-edge technology -- the latest is not necessarily the greatest. You want something tried, bug-free, and popular enough to have a full selection of add-ons created by independent vendors.

6. Start learning enough about computing to make intelligent decisions. The time to learn is now, not when you're running a billion-dollar company and there's a chance you'll wake up to realize everything is wrong because you've been dependent upon someone who knows bits and bytes but not your business. Leave the detailed expertise to others but understand enough to guide the process.

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Charles B. Wang is chairman and CEO of Computer Associates International, in Islandia, N.Y. He is the author of Techno Vision: The Executive's Survival Guide to Understanding and Managing Information Technology (McGraw-Hill, 1994).